Scope and delimitation for inventory system

Objectives of inventory management

Products and services that depend on raw materials, parts and other supplies need consistent inventories to operate effectively and to maximize profits. Since counting inventory takes time, smaller businesses are more likely to use the periodic system. The company remains unaware of the theft or waste, known as shrinkage, until it performs a physical count at least once per year. A business may use one system or the other, or a combination of the two. Cafe Perpetuo Resto Bar is a business engage in food and drinks industry. The account details were provided by the system administrator. Businesses moving large amounts of inventory may want to have a finer level of detail than periodic inventory allows. The proposed system will provide an easier way of using the inventory and sales system since it will be computerized. The perpetual system, in contrast, adjusts the inventory balance each time a transaction, such as an inventory purchase or a sale, occurs, and it provides real-time information. The Periodic Inventory System A manufacturer may use a periodic inventory. Measuring the change in inventory allows the company to determine the cost of inventory sold during the period. The proposed system includes a data back-up in case of file lost and system failure.

It will provide precise, complete and faster record keeping. There and Back: The Scope of Inventory Regardless of which type of inventory system a company uses, the scope of the inventory may change based on the strategic targets of the business.

Throughout the period, the company takes customer orders without knowing the exact inventory count or whether enough products are available to meet customer demand. The periodic system records the inventory only at the end of each period, leaving the balance unchanged throughout the period.

scope of the study of inventory management

A manufacturer of durable goods may use inventory information to control the costs of raw materials and to maximize margins, while a food manufacturer may prioritize fast turnover of inventory to ensure freshness.

Cafe Perpetuo Resto Bar is a business engage in food and drinks industry.

scope of inventory management pdf

The other limitation is that an employee might enter data incorrectly, introducing inaccurate information that can compromise decision-making. On the other hand, a small cleaning business may not need more than an occasional and rather informal scan of its cleaning supplies inventory to function efficiently.

advantages and disadvantages of inventory management pdf

The system will be equipped with a security access that will prevent unauthorized access in the system. The proposed system will eliminate paper works and time consuming tasks. The proposed system will generate Sales and Inventory reports respective to three period of time such as daily, weekly and monthly to identify and keep the tracks all data processing assets in the storage.

With the periodic system, the company knows the inventory level with certainty only when it physically counts the inventory at the end of each period. It also results to data redundancy and poor precision of reports.

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Scope & Limitations in Inventory Systems